By Julie Wernau

Cotton prices continued to climb Friday as traders priced in more robust sales than expected while production in India is on the decline.

Cotton for December delivery rose 0.9% to 76.48 cents a pound on the ICE Futures U.S. exchange, a fresh two-year high.

For the 2016-17 marketing year, which began Aug. 1, the U.S. Department of Agriculture reported weekly U.S. exports of 226,700 bales of cotton, a 25% increase from the previous week and 10% rise from the prior four-week average.

Commerzbank said in a note that additionally, there are new concerns about the supply of cotton from India, the world's largest cotton producer. According to a state research institute, the excessively dry weather in the key Gujarat growing region could see the cotton crop in India decline by 10% in the crop season that begins in early October, the firm said.